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Archive for the ‘Chicago’ Category

Today’s  Chicago Sun-Times discusses the Exelon Bail-Out Bill.

What began as a means of rewarding Exelon Corp. for generating “clean” nuclear energy and  keeping unprofitable plants in Clinton and the Quad Cities open has evolved into a far-reaching and  contentious revamp of state energy policy.

Check out the article here.

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M.W. Frerichs, Illinois State Treasurer

M.W. Frerichs, Illinois State Treasurer

This past Tuesday (Jan. 26), Illinois State Treasurer Michael Frerichs announced that Illinois will invest more than $220 million in emerging tech companies, which he predicted will create an estimated 3,600 jobs over the the next three years. In an article in the current issue of Crain’s Chicago Business, Treasurer Frerichs is quoted as saying:

People ask how can you afford to make these investments at a time like this? I ask, how can you afford not to make these investments?”

In the mind of any thinking person, alarms should go off whenever someone answers a question with a question, and this goes double for public office holders such as Mr. Frerichs.

The real questions are why anyone should consider state government capable of picking winners among high-tech venture startups, and, more importantly, whether state government should be using public funds to pick winners in the first place.

Over the course of decades past, there have been some notable successes of government (principally federal, rather than state) sponsorship of R&D. After WWII, the U.S. Gov’t. sponsored research into turbine engines for use in jet fighter planes, including using what was valuable in jet engine technology Germany had developed during the war. Likewise, post-war federal investment in computer research for defense purposes started the computer revolution and gave us the internet that we have today.

But those are the success stories. Did Mr. Frerichs and everyone else at Crain’s forget about that Solyndra investment? Sure, it was an investment at the federal rather than the state level, but that’s a quibble. Loan guarantees for Solyndra are in essence no different from the $220 million in taxpayer funds that Illinois is about to plow into tech start-up ventures.

Plus, the feds get to play with much bigger chunks of change than the $220 million that Mr. Frerichs is talking about, which means that they have better odds of having at least a few successful companies amidst all the tech startups that wind up in the dustbin of market history.

According to the Treasurer’s press release, the $220 million “will come from existing investments and is not entangled in the state budget impasse that involves the General Revenue Fund.” Is that supposed to take a load off our minds? Could that money not be used for other, more pressing needs?

Frerichs asks how Illinois can not make such investments. Well, for starters, it’s been a few years now and Illinois still doesn’t have a budget. The City of Chicago is about to impose the largest real property tax increase since Fort Dearborn was disassembled and used for firewood. The Chicago Board of Ed is staring at a funding gap in the hundreds of millions of dollars, and there’s no sign of any fiscal cavalry riding to the rescue from Fort Springfield. To make matters worse (yes, they can get worse), one may reasonably ask whether the CPS financial debacle will require yet another real property tax increase.

The only safe conclusion is: no option is off the table.

But let’s turn back to picking winners for a moment. Mr. Frerichs will be investing public moneys indirectly, in venture funds managed by supposed investment pros, and not directly in the startup companies themselves. That’s a distinction without a difference. By investing indirectly, Illinois state government merely delegates, in part, winner-picking to the fund’s managers.

If I remember correctly, the Rauner administration is of the Republican persuasion. The gospel according to the Republican patron saint, Ronald of Reagan, tells us that “government is not the solution to our problem; government is the problem.” I guess that gospel doesn’t apply when government is handing out money to venture capital funds.

Having the government pick winners, whether directly or indirectly, smells a lot like “government industrial policy,” which in turn smells a lot like (dare I say it?) … socialism. (!!!)  There’s no evidence anywhere that any level of government, state or federal, is capable of picking winning technologies in the market. Sure, the turbine technology and the computer revolution were nice. But the history of “industrial policy” (the formal term for government picking winners and losers) presents an almost uniform series of abject failures. If one thinks that the state’s indirect investment of $220 million will leave the venture fund managers to pick the winners free of state government influence, I can sell you a bridge that connects Brooklyn to lower Manhattan, and it’s a genuine antique.

Remember that country, what’s the name of it again…oh, yes, Japan. Japan had its Ministry of International Trade and Industry, and we can see what a great success that was. MITI was supposed to foster innovative government/industrial partnerships for investment. Sound familiar? But even the Japanese admit that such limited growth as they’ve had came from not following, rather than following, MITI’s directions. MITI favored the development of steelmaking in Japan, and disfavored such exports as autos and electronics. Japan now has three times the steelmaking capacity that it needs, with no native natural resources (iron ore, for example) with which to feed it even if there were market demand for more steel. Meanwhile, automobiles and electronics have been Japan’s landmark successes in international trade.

State government always characterizes these taxpayer-funded venture investments as the “but for” money, the funding without which a promising project would not go forward. That’s patently false. If a project is promising enough, the private sector will fund it.

Worse still, some economists claim that when government steps in with this type of investment, it doesn’t add any money to the pot of investment funds, but instead only displaces it, and that the funding so displaced is much larger than the government funds invested. That’s a net negative.

I’d just like to hear the Republican rationalization for having government making industrial policy and having state officials pick, or influence the picking of, winners and losers in the market.

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Emmanuel, Rahm

The lead article in today’s Chicago Tribune reviews the chronology of City Hall events following the shooting of Laquan McDonald in late 2014. Rahm met frequently with his top aides and Police Superintendent Gerry McCarthy. Rahm expects the people of the City of Chicago to believe that no one bothered to tell him about the McDonald shooting, about the dash cam tape that gave the lie to all of the Chicago Police Department after-action reports on the shooting, or about the pressure applied to civilian witnesses to change their stories.

The thought that Rahm Emmanuel’s top aides and advisors, including a top-level attorney in the Law Department and the Chicago police superintendent, would not tell him about the McDonald shooting, that they would withhold from him information about a matter that was likely to lead to a multi-million dollar settlement payout by the  City of Chicago, is laughable on its face.

And that’s just the dollar side of the equation. The political side makes his claims of ignorance even more laughable. No one could work in any position of responsibility under Rahm Emmanuel without having a very finely-honed political sense; maybe not as fine as Rahm’s own, but certainly far above average. While the McDonald drama played out, Rahm was in an unusually close election, followed by an even more unusual run-off election against Chuy Garcia. No one working for Rahm could not know what a political bombshell this was, especially in this election year. Yet the Mayor expects us to believe that nobody told him anything substantive.

Right.

Remember, we’re not talking about just any Chicago mayor. We’re talking about Rahm Emmanuel. This is the same Rahm who cherishes and flaunts his reputation as the ass-kicker to end all ass-kicking, the same Rahm who could give lessons in micro-management to the likes of Walt Disney, Frank Perdue and Bill Marriott, each a notorious micro-manager.

What fairly leaps out of the email trail is the complete absence of Rahm’s name as an addressee. That is precisely the kind of trail a participant wishing to be viewed subsequently as a non-participant would try to establish.

One of the chief duties of Rahm’s acolytes is to keep as much distance as possible between Rahm and any scandal. If there’s a smoking gun lying around somewhere, you’d better be sure Rahm’s fingerprints aren’t on it, or you’ll be looking for a new job. If Rahm had a coat of arms with a motto, it would probably run something like this: “Honi soit qui mauvaises nouvelles ne garder pas tres loin de Rahm.” (“Evil be to him who fails to keep bad news far away from Rahm.)

Rahm apparently thinks that Chicago ought to just accept his story and get over it. (“Move  along, nothing to see here.”) It is this type of attitude that explains why outsiders like Trump and Sanders are leading in the polls in this political year.

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Domesticated, at Steppenwolf through February 7, 2016

Domesticated, at Steppenwolf through February 7, 2016

Melanie Neilan plays the role of Casey, the daughter of a scandal-plagued politician, in Steppenwolf’s Domesticated. The synopsis:

Politician Bill Pulver faces the cameras to stumble his way through a carefully crafted apology as his wife Judy stands stoically behind him…. but what is she REALLY thinking? We are about to find out in Bruce Norris’s wickedly funny, unpredictable play about a marriage burst apart by a sex scandal. This scathing, wildly entertaining play investigates gender politics, modern marriage and the sexual mysteries of the animal kingdom.

Melanie Neilan, as Casey in Steppenwolf's Domesticated.

Melanie Neilan, as Casey in Steppenwolf’s Domesticated.

 

Tom Irwin as Bill Pulver, with his daughters, Cassidy (Emily Chang, left) and Casey (Melanie Neilan)

Tom Irwin as Bill Pulver, with his daughters, Cassidy (Emily Chang, left) and Casey (Melanie Neilan)

 

Mary Beth Fisher, Meg Thalken and Melanie Neilan in Steppenwolf's Domesticated

Mary Beth Fisher, Meg Thalken and Melanie Neilan in Steppenwolf’s Domesticated

“This is, for sure, a very juicy play, a savvy discussion-starter,” Chicago Tribune 

Domesticated is as funny and grotesque as we know Norris can be,” Chicago Critic 

“…a sensational cast of 14, “Domesticated” puts a more diverse 21st century twist on Edward Albee’s emasculating “Who’s Afraid of Virginia Woolf,” Chicago Sun Times

Check out the trailers here.

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Emmanuel, Rahm

When a dashcam of po-lice brutality
Displayed clear CPD typicality
The cops said, with aplomb,
And with backup from Rahm,
The cop acted with pro-portionality

Rahm said “Bad, but not institutional.”
Yet his “Sorry!” was circumlocutional:
“It is quite a pity,
“But don’t blame the City;
“Sixteen shots are quite constitutional.”

But the dashcam proved too big a bombshell.
And the masses thronged Casa Emanu-el,
Shouting “Rahm, read our lip!
Ist kaput* Mayorship!”
“So pack up and leave office pellmell!”

But Rahm had another design,
For blame to fast reassign.
“If you crawl back in your beds,
“I’ll call in the Feds,
“But don’t pressure me to resign!”

[Kaput, Ger. for utterly finished, destroyed.]

If you care to add a stanza, please feel free to comment.

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CPD Violence

Chicago Police demonstrating standard procedure for requesting citizens to return home.

As police brutality scandals continue to roil Rahm’s administration, and as the Justice Department steps in, a modest proposal for a solution comes to mind.

As matters now stand, all of the incentives undermine the rule of law and the administration of justice.

Here’s one way that we might realign incentives. When police are determined by a court to have violated a citizen’s civil rights and the City of Chicago must respond in damages, those damages should be paid with moneys withdrawn from the police pension fund. This would  very likely encourage the vast majority of officers who act within the law to rid the CPD of those officers who break it.

After all, the underlying problem with the CPD is that they have absolutely no skin in this game. When they break the law, Chicago taxpayers foot the bill, and the Rahmulans spare no effort to cover it up.

 

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